CAIIB(2010)

(compulsory)-paper I

ADVANCED BANKMANAGEMENT

MODULE A: Economic Analysis

Module A

The fundamentals of Economics: Scarcity and Efficiency-Microeconomics &

Macroeconomics in brief- Types of economies - Market, Command and Mixed
Economies- Macroeconomics: Business cycles- Money and banking-Unemployment &
inflation- Interest rate determination and various types of interest rates.
Indian Economy (a) Overview of the Indian economy including recent reforms
(b)Interaction between fiscal, monetary & exchange rate policies in India -Financial
Markets(i)Money Market(ii)Capital Market (iii)Foreign Exchange Market –
globalisation and its impact-Challenges ahead
Banking & Finance – current t issues

MODULE B: Business Mathematics

Concept of time Value of Money-Net Present Value-Discounted Cash Flow-Sampling

methods-presentation of data-analysis and interpretation of sample data-hypothesis
testing -Time series analysis-mean –standard deviation-co relation-Regression-covariance
and volatility-Probability Distribution-Confidence interval analysis-estimating
parameters of distribution-Bond valuation-duration-modified duration.
Linear programming-decision making-simulation-Statistical analysis using spreadsheets.
Features of Spread sheet—Macros, pivot table, statistical and mathematical formulae.

MODULE C: HRM in banks

Fundamentals of HRM ,development of HRM in India, Relationship between HRM and

HRD, Structure and functions of HRD, Role of HR professional ,Human implications of
organizations ; training and development, attitude and soft skills development , role and
impact of training, career path planning and counseling , employee behaviour ,theories of
motivation and their practical implications, role concepts and analysis, self development.,
Performance Management and appraisal systems; Reward/punishment and compensation
systems., HRM and Information Technology, information and data management,
knowledge management.

1
MODULE D: Credit Management

Principles of Credit Management –Credit Appraisal –Analyzing Financial Performance-

Relationship between items in Balance Sheet and Profit and Loss Account. Trend
Analysis, Comparative Statement-Common size Statement, Preparation of projected
Financial Statements.-Ratio analysis- Interpretation and analysis of different Ratios,
Limitation of the use of ratios. Statement of Sources and Applications of Funds.

Structuring a Credit Proposal -Working Capital –Concept and Management – Appraisal

techniques for different constituents- trade cycle- credit rating-Technical and economic
feasibility studies-Credit Rating-Rating Methodology-Objectives and benefits of rating-
Term Lending- Debt Service Coverage Ratio-Cash Flow Analysis- Cash Budget -Bill
Finance- Deferred Payment Guarantee-Credit Scoring- Credit Delivery System-
Documentation- -Post sanction supervision, control and monitoring of credit-
Consortium finance, multiple banking, Syndication of loans. Infrastructure financing.
Dealing with credit defaults, Stressed assets, Corporate Debt restructuring, SARFAESI,
NPAs, recovery options, write-off. Disclosure of the list of defaulters: objectives and
procedure. Appraisal methodology for different type of clients/products

2
CAIIB(2010)
(compulsory)-paper II

BANK FINANCIAL MANAGEMENT

MODULE A: International Banking

Forex Business; factors determining exchange rates, Direct and indirect quotations,
spot/forward rates, premium and discount, cross rates.
Basics of forex derivatives ;forward exchange rates, contracts, options , swaps.
Correspondent banking, NRI accounts
Documentary letters of Credit-UCPDC 600, various facilities to exporters and importers.
Risks in foreign trade, role of ECGC, types of insurance and guarantee cover s or
ECGC.Role of Exim Bank-Role of RBI and exchange control-Regulations in India, Role
of FEDAI and FEDAI rules.-Role of FEMA and its rules

MODULE B: Risk Management

Risk—Concept- Risk in Banks- Risk Management Framework-Organisational

Structure-Risk Identification-Risk Measurement Sensitivity -Basis Point
Value (BPV)- Duration-Downside Potential- Value at Risk, Back Testing-
Stress Testing-Risk Monitoring and Control-Risk Reporting -
Market Risk identification, Measurement and management , rating methodology, risk
weights, eligible collateral for mitigation, guarantees; credit ratings, default probabilities,
Credit risk spreads, risk migration, transition matrices and credit metrics , Counterparty
risk.
Credit exposures, recovery rates, risk mitigation techniques,.-Operational and integrated
Risk Management-Risk management and capital Management- Basel II – Current
guidelines on risk management

MODULE C: Treasury Management

Concepts and function; instruments in the treasury market, development of new financial
products, control and supervision of treasury management, linkage of domestic
operations with foreign operations.
Interest rate risk, interest rate futures
Mix/Pricing of Assets, Liabilities -On-Balance Sheet Investment and Funding Strategies -
Stock options, debt instruments, bond portfolio strategy, risk control and hedging
instruments.
Investments-Treasury bills ,money market instruments such as CDs, CPs , IBPs
Securitisation and Forfaiting ; refinance and rediscounting facilities.
Derivatives- Credit Default Swaps/ Options

3
MODULE D: Balance Sheet Management

Prudential norms-Capital Adequacy. Implementation of Basel II guidelines: RBI

guidelines .Banks Balance Sheet- Components of assets/Liabilities ALM Implementation
– RBI Guidelines - Gap Analysis-Mechanics, Assumptions, and Limitations-Illustrations
of Actual Gap Reports-The Relationship Between Gap and Income Statement-Funding
Liquidity-Trading/ Managing Liquidity-Contingency Funding-Business Strategies: Profit
and profitability analysis, Asset Classification- provisioning-effect of NPA on
profitability, Shareholder value maximization & EVA-profit planning-measures to
improve profitability. Disclosure guidelines.

4
CAIIB(2010)
Optional Papers-Candidate to choose any one
CAIIB
CENTRAL BANKING (optional-1)

Module A: Rationale and Functions of Central Bank

I) Evolution and Functions of Central Banking: Evolutions of Theory

and Practice of Central Banking, Development of Central Banks in
Developed and Developing countries.
II) Functions of a Central Bank: Banker to Government, Banker to
Banks, Monetary policy Functions, currency Issue and
Management, payment system function, Maintaining Internal and
External values of currency, Regulation, Facilitation and
supervision of Financial System , Promotional Functions to support
growth and other National objectives, Development of Financial
Markets, Institutions and communication policies.
III) Contemporary Issues: Desirability, Autonomy and independence,
Credibility, accountability and transparency of a Central Bank,
conflict with fiscal policies.

Module B: Central banking in India:

1. Reserve Bank of India: Organisational evolution, constitution and

Governance, Major organizational and Functional Developments
over time, Recent Developments, RBI Act.
2. India Specific Issues: Banking Regulation Act, FEMA, Banking
Ombudsman Scheme, Financial Sector reforms, other financial
regulators and division of functions. Institutions set up by RBI;
NABARD, IDBI, DFHI, IRBI, UTI.
3. Glossary of Central Banking Terms.

Module C: Monetary Policy and Credit Policy

1. Monetary Policy : Objectives, Reconciling dual objectives, The

Taylor Rule, Indicators of Policy, instruments of policy (Bank Rate,
OMO, CRR, SLR etc.), policy Transmission mechanism and
channels ,transparency of policies , Lags in policy.
2. Credit Policy: Objectives, Theory and Practice, Instruments.

5
 3. An over view of Fiscal Policy: Importance of Budgets, Union
Budget, State Budget, Finances of Union and State Governments,
Finance Commission.
4. Striking balance between inflation and growth through monetary
and fiscal policies.

Module D: Supervision and Financial Stability

1. Indian Financial System: Constituents of Indian Financial Markets

and their Regulation. Evolution of Bank Regulation and supervision.
2. Financial Stability : Financial Development Vs Financial stability ,
Risks to Financial stability, Early warning signals and remedial
action, Liquidity Management, Regulation and supervision of Banks ,
Risk Management in Banks, The Basle Norms ,Prudential Norms,
Effect of liberalisation and Globalisation on Financial Stability,
Linkage to International Financial Stability, International standards
and codes. Role of Supervisor under Basel II.

6
 CAIIB
INTERNATIONAL BANKING (optional-2)

Module A: International Banking and Finance:

1) International Banking
1.) Global Trends and developments in International Banking
ii) International Financial Centres, Offshore Banking Units, SEZs.
iii) Profitability of International Banking operations
iv) Correspondent Banking and inter-Bank Banking
v) Investment Banking, Wholesale Banking, Retail Banking, Merchant
Banking
vi) International Financial Institutions: IMF, IBRD, BIS, IFC, ADB
vii) Legal and regulatory aspects
viii) Risk Management

2) International Finance
i) Fundamental Principles of Lending to MNCs, documentation and
Monitoring
ii) International Credit Policy Agencies and Global Capital Markets
iii) Raising resources: Availability features and risks of various Equity and
debt products like ECBs, ADRs, ECCBs and other types of Bonds etc,
Syndication of loans
iv) Project and infrastructure Finance: Investments both in India (FII &
FDI) and abroad, Joint ventures abroad by Indian Corporates.
Investment opportunities abroad for resident Indians.
v) Financing of mergers and acquisitions

Module B: Foreign Exchange Business:

i) Foreign Exchange Management Act (FEMA) and its philosophy

ii) Different types of Exchange Rates
iii) RBI and FEDAI: their role in regulating Foreign Exchange Business
by Banks/other Authorised Dealers.
iv) Rules regarding rate structure cover operations, dealing room
activities and risk management principles, including correspondent
Bank arrangements.
v) NRI customers and various banking and investment products
available to them under FEMA.
vi) Remittance facilities

7
Module C: International Trade

i) Various Aspects of International Trade, Government policies, DGFT

and their schemes, Customs procedures, Banks’ role in implementing
these policies and schemes
ii) WTO- its impact
iii) Balance of payment, balance of trade, Current account and capital
account convertibility.
iv) Documents used in Trade: bill of exchange, invoice, Bill of lading,
Airways bill, Insurance policy etc.
v) Role of Banks in foreign Trade
vi) Letters of credit; importance in international trade, various types of
LCS, settlement of disputes, UCP 600, INCOTERMS.
vii) Exchange control relating to foreign trade. Returns required to be
submitted to RBI

2) Import/ Export Finance:

i) Laws governing trade finance viz, FEMA, NIACT, Indian stamp Act,
EXIM policy, RBI/ FEDAI guidelines
ii) Role of Banks, including EXIM Bank, in financing Foreign Trade,
various facilities to Exporters and importers including project
finance, forfaiting and factoring
iii) Risks involved in foreign trade finance: Country risk, currency risk,
exchange risk, legal risk etc, Role of ECGC.

Module D: Derivatives:

1. Treasury operations of banks and corporates

2. Derivatives as hedging instruments, types of instruments available in
Indian Market.
3. RBI rules and guidelines regarding derivatives
4. Mathematics of derivative valuation and pricing
5. Risk assessment of derivatives, Lessons from recent crisis in derivatives
market.

8
 CAIIB
RURAL BANKING (optional-3)

Module A: Rural India

Demographic features; Population, occupation, literacy, socio-economic

development indicators, health, nutrition and education,-urban migration.

Characteristics of Rural Society; Caste and power structure-rural social

stratification,

Economic Features; Economic life of rural people, share in National income-

trends in per capita income, rural money markets, rural indebtedness, rural
poverty-main causes and methods of measuring rural poverty.

Rural infrastructure; Transport, power, markets and other services.

Agriculture Economy; Structure and characteristics of Indian agriculture, Role

of agriculture in economic development, agriculture-industry linkages,
Resources and technical changes in agriculture, constraints to agriculture
development, Emerging issues in Indian Agriculture.

Rural Development Policy; Govt. policies and programmes for rural farm and
non-farm sectors. Economic reforms and its impact on rural economy.

Rural Issues; Development issues, Management Issues, Marketing issues, Pricing

issues,

Module B: Financing Rural Development

Regulation of Rural Financial Services; Function and policies of RBI in Rural

Banking, NABARD-Main functions, role, refinance support. Lead bank approach,
State level and district level credit committees.

Rural Credit Institutions; Co-operative Credit Societies and Banks, Land

Development Banks, Regional Rural Banks, Commercial Banks. Role of
Information and communications technologies in rural banking-Models,
Financial inclusion & inclusive growth for rural development banking, rural
insurance—micro insurance scheme, concept of business facilitators and
business correspondents in rural financing.

Financing agriculture/ allied activities; Crop Loans-Assessment, sanction,

disbursement, rephasement. Term loans for irrigation, farm mechanization,
Godowns/cold-storage facilities etc. Financing for allied agriculture activities

9
like Horticulture, Fisheries, Social forestry, etc. Finance against
warehouse/cold storage receipts

Financing Rural Non-Farm Sector (RNFS); Importance of RNFS, Segments in

RNFS, Role of Development and Promotional Institutions in RNFS

SME Finance; Definition of SME .Importance to Indian economy. Financing of

SME and small enterprise Refinance from SIDBI. Project funding techniques and
requirement assessment. Cluster based approach and joint finance with
SIDBI.MSMED Act 2006, CGTMSE, Working capital assessment of SMEs. Risk
rating of SME proposals, role of rating agencies and rating methodology. Revival
of sick units; revival package and implementation, Stressed assets under
rehabilitation. Debt restructuring mechanism for SMEs.

Module C; Priority Sector Financing and Govt initiatives

Components of priority sector. RBI guidelines.

Government initiatives; Poverty alleviation programmes/Employment

programmes/production oriented programmes-rationale and philosophy,
progress and impact, problems and deficiencies.

Rural housing and urban housing schemes under priority sector, their refinance,
educational loans

Module D; Problems and prospects in Rural Banking

Role of rural banking.

Problems of rural branches of commercial banks- transaction costs and risk

costs. Technology based Financial Inclusion.

Emerging trends in rural banking-financing poor as bankable opportunity, Micro

Credit, Self Help Groups/NGOs, linkages with banking, latest guidelines of GOI
and RBI.

10
 CAIIB
FINANCIAL ADVISING (optional-4)

MODULE A
Introduction to Financial Advising:

Indian financial and investment industry, participants in the Indian finance

system, Indian economic and social environment, Role of Regulators
viz., RBI, SEBI etc

Financial counseling- Essentials in financial counseling, Profile of effective

counselor, Basic communication principles, Elements of non-verbal
behavior, Attending and Listening skills, Counselor leading responses,
understanding and meeting client’s needs through financial planning,
evolution of financial planning as a profession. Marketing of financial
services.

Fundamental Investment concepts, The Time Value of Money, Risk-Reward

Trade-Off, Diversification -Spreading Risk, Investment Timing,
Direct Investment - What Are They and Who Uses Them?

MODULE B
FINANCIAL PLANNING

Financial Planning, role of a financial planner, fundamental investment

concepts, asset classes, asset allocation towards a financial plan, working with
clients, gathering initial/ additional information from the client, understanding
investor’s risk appetite, meeting the client’s objectives, Asset Allocation,,
Good practices in financial planning, Content of a comprehensive financial
plan, recommending financial planning strategies to investors, Asset allocation
–the strategic tool-Selection of Investment and Insurance Products,
Implementation, ongoing Service, using stop loss, understand market
behaviour.

MODULE C

FINANCIAL INVESTMENT PRODUCTS

Financial investment products - portfolio analysis & selection, efficient

markets, securities markets-primary market, secondary market,
depository & investment process, regulatory framework,
fundamental and technical analysis-basic philosophies and
underlying assumptions - bond and money markets, Indian debt

11
 markets- securities traded in debt market, Commodities Market,
insurance products, pension products, mutual fund industry-
products & services, banking products, Investment in real estate.
Cash generation and return on investment.
Statutory provisions regarding starting of business /industrial units by
NRIs/MNCs.

MODULE D

TAXATION
Income Tax law, important definitions-person, assessee, agriculture income,
capital/revenue receipts/expenditure, gross total income, total income,
residential status, heads of income viz. salaries, income from house property,
profits and gains of business or profession, capital gains, income from other
sources., income exempt from tax, permissible deductions from gross total
income , income tax return, tax deducted at source
Tax planning strategies-- house wife, salaried person, businessman, persons
having income from more than one source, retirement planning and taxation,
tax triggered investments
Estate Planning, will, administration of an estate, passing of an asset, tax
planning through wills and trusts, taxation of terminal benefits

12
 CAIIB
CORPORATE BANKING (optional-5)

MODULE-A
Corporate Banking and Finance:
Corporate Banking: Meaning and importance, various services provided viz Cash
Management, Salary Payment, Debt Management, Factoring and forfaiting,
Trusteeship, custodial services, Business advisory, off shore services, trade
services, Forex Management, etc.

Corporate Deposits: Importance of Institutional deposits vis a vis retail deposits

Corporate Finance: Working capital finance, Fund and Non fund based limits
and Import-Export finance. Corporate Debt Restructuring.

MODULE-B
Investment Banking:
1) Meaning and scope of Investment Banking, Evolution, overview of current
state of Investment Banking in India.
2) Merchant Banking: Advisory services for equity / debt issues, Management,
placement and distribution of equity/debt.
3) Mergers and acquisitions, Divestitures: identification, structuring,
negotiation and execution, arranging finances etc.
4) Corporate advisory services: Capital restructuring, project advisory, private
equity and venture capital, Loan syndication etc.
5)

MODULE-C
Project and Infrastructure Finance
Characteristics of Project Finance-Technology selection, assessment of
technical collaborator-Market Analysis: International competitiveness and
SWOT analysis-Assessing the project cost-Means of financing projects-
Estimation of project cash flows-Use of free and equity cash flow valuation for
assessing projects-Financial Analysis: Break-even point analysis, decision tree,
scenario analysis and Internal Rate of Return, sensitivity analysis-Common risks
in projects-Risk mitigation methodologies in projects-Securitisation as a tool
for risk mitigation-Project planning-Network techniques for project
implementation-Disbursement, supervision and follow up of project by lender- -
infrastructure financing –cash flow –deal agreement with parties involved- SPV-
Monitoring and follow-up of the project

MODULE-D
Treasury Management
Structure: Front, back and mid office, Bond dynamics: Treasury management;
concepts and functions; Financial Market-An Overview. Instruments in the
treasury market; development of new financial products; control, and

13
supervision of Treasury management; linkage of domestic Operations with
foreign operations. Hedging through derivatives investments-Treasury Bills-
Money markets instruments such as CDs, CPs, IBPs, Assets securitisation and
Forfaiting: -Fundamental & Technical Analysis-. Foreign Exchange Calculations
- Money Market Calculations- Fixed Income Calculations- Short-term Derivative
Calculations- Option Calculations

14
 CAIIB
RETAIL BANKING (optional-6)

MODULE-A; Introduction
History and definition, role within the bank operations, Applicability of
retailing concepts distinction between Retail and Corporate/Wholesale
Banking

MODULE-B; Retail Products

Retail Products Overview -- Customer requirements, Products development
process, Liabilities and Assets Products – Description of Liability products,
Description of Asset Products, Approval process for retail loans, Credit
scoring.
Important Asset Products—
Home Loans-Eligibility, Purpose, Amounts, Margin, Security, Disbursement,
Moratorium, Prepayment issues, Repayments/ Collection.
Auto/ Vehicle Loans-- Eligibility, Purpose, Amounts, Margin, Security,
Disbursement, Moratorium, Prepayment issues, Repayments/ Collection.
Personal Loans— Eligibility, Purpose, Amounts, Security, Disbursement,
Moratorium, Prepayment issues, Repayments/ Collection.
Educational Loans— Eligibility, Purpose, Amounts, Security, Disbursement,
Moratorium, Prepayment issues, Repayments.
Credit/ Debit Cards--Credit Vs Debit Cards, Eligibility, Purpose, Amounts,
Margin, Security, Process of using the cards, Billing Cycle, Credit Points.
Other Products—Remittances/ Funds Transfer
MODULE- C; Marketing /Selling of retail products, MIS and accounting
Retail Strategies; Tie-up with Institutions for personal loans / credit cards
/educational loans, with OEMs/ Authorised Dealers for auto/vehicle loans, and
with builders/developers for home loans
Delivery Channels -- Branch, Extension counters, ATMs, POS, Internet Banking,
M Banking.
Selling Process in retail products-Direct Selling Agents.
Customer Relationship Management— role and impact of customer relationship
management, Stages in customer relationship management process.
Regulations and compliance

Technology for Retail Banking—Static information, Account opening, basic loan

origination data etc. Updated information like income details at different
frequencies. Transaction information from disbursement till final settlement of
the loan amount. Analytics/Alerts.
Accounting entries—Loan process and the relevant accounting including EMI
Computation.

15
MODULE-D; Other issues related to Retail Banking
Securitisation, mortgage based securities.
Trends in retailing- New products like insurance, demat services ,
online/phone Banking, property services , investment advisory/ wealth
management, Reverse Mortgage .Growth of e-banking, Cross selling
opportunities.
Recovery of Retail Loans—Defaults, Rescheduling, recovery process. SARAFAESI
Act, DRT Act, use of Lok Adalat forum. Recovery Agents-RBI guidelines.

16
 CAIIB
CO-OPERATIVE BANKING (optional-7)
MODULE-A
Principles and Laws of co-operative Banking
Law and rules relating to Co op Banks

Principles of Co-operation-brief overview of structure of co-operative credit

institutions- Membership-Legal aspects of banking operations-Banking related
laws-Provisions of Bankers Book Evidence Act-Special features of Recovery of
Debts Due to Banks and Financial Institutions Act, 1993-Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002-The Consumer Protection Act, 1986 -Banking Ombudsman

MODULE- B
Co-operative Banking Operations:

Deposits, Credit & Investment Management

Different Deposit Products- Deposit Policy -Credit Management Loans and
advances-Priority sector lending-MSME financing-Personal Finance- Banker-
Customer relations - Garnishee orders and Attachment orders, Bankers’ right of
lien, set-off and appropriation -Indemnities and Bank Guarantees; Loan Policy-
Management of NPA Investment Management-CRR/ SLR Management -Financial
Markets-guidelines of RBI/NABARD in regard to investment.-Money Market –Call
money- Repos and Reverse Repos-Foreign Exchange Market- Debt market-
Bancassurance -Meaning and Scope Investment Policy

MODULE- C

Technology, Risk management

Technology Banking-Electronic Payment systems – core banking solutions -
Electronic funds transfer systems -RTGS- Risk Management -Exposure limits-
Asset Liability Management- Capital Adequacy-Basel II- Profit and Profitability-
Approach of Banks to profitability-Effects of NPA on profitability-A profitability
Model-
.
MODULE- D

Supervisory and Regulatory aspects

Banking Regulation Act (As applicable to Co-op. Banks)-Role of R.B.I.-
Supervision and control -Branch licensing-Inspection/ audit-Statutory/Reserve
requirements- R.B.I. guidelines on Deposits, advance, priority sector lending,
weaker section lending, Control Returns-Recommendations of Marathe
Committee, Madhav Rao Committee and Vaidyanathan committee-Role of

17
Directors and Corporate Governance –Best Practices- Management Information
System

18
 CAIIB
HUMAN RESOURCES MANAGEMENT (optional-8)

Module A: Human Resources Management

1) Concepts, Policies and Practices: Fundamentals of HRM; Importance of

Human Capital, Management of transformation, New insights into HR
Management and contemporary issues, Relationship between HRM and HRD;
Structure and Functions, Policies and Practices, Role of HRD Professional,
Development of HRM in India.

2) Behavioural Dynamics in organizations; Person—Job Fit, Group Dynamics,

Group Problem Solving and effectiveness, Leadership and Team building,
Change Management, Human Response Implications of benchmarking;
TQM,BPR,ISO 9000 Series and other techniques for Organizational
improvement and Management of Service Industry; Quality Circles. Six
Sigma and its implication in organizational development.

3) Organizational Change and Development; Responsibility Charting,

Conditions for Optimal Success, Role of Change Agent and Managing Change.

4) HRM in Banks: Traditional Role of Human Resources Department in Banks,

Expectations from H R Department ,Conflict of new initiatives with work
culture and capacity, Major HRM challenges facing Banks, Core Banking and
HR challenges,

5) Knowledge management in Banks ; Need for Knowledge Management

Officer, Role in the Banks, HRM and Information Technology , Information
and Database Management, Preparation and updation of Manuals and job
cards, Linkage with Educational Institutions.

Module B : Building an HR strategy:

1) Strategy Formulation and implementation; Need for a distinctive H R

strategy, Formulating the strategy; connecting strategy to organization,
aligning H R Systems with decision framework, Relationship between
sustainable strategic success and performance of the organization,
Execution of strategy: Role of CEO, Executive team, and line Managers,
Succession Planning , HRD Audit. , Effectiveness of HRD, Best HR practices
in banks.

2) Organizational Communication; Barriers to Communications, Steps for

effective communication in the organisation

19
3) Manpower Planning; Recruitment, Selection, Placement and Promotion.
Recruitment Vs Outsourcing: Concept and Feasibility of Outsourcing,
advantages, disadvantages and constraints. , Compensation; incentive
system linked to productivity, dealing with Attrition.

4) Performance Management and Appraisal Systems : Performance Appraisal

System, Role of P A S , Emerging Trends , 360 degree performance
Appraisal, Appraisal Vs Feedback, competency mapping, key performance
areas (KPA)

Module C: Motivation, Training and Skill Development:

1) Human implications of Organisations; Learning and instructions, Learning

Processes, Employee Behaviour, Theories of Motivation and their practical
implications., Motivational strategies, Reward and Incentive schemes, job
enrichment , job rotation. Employee Development strategies and
Techniques.

2) Training and Development; Attitude development, Role and impact of

training, Career Path Planning and Counseling, Changing face of Banking ,
Future of Bank Education, Identification of Training Needs.

3) Training Methodology; subject matters of Training , Training infrastructure

in Banks, outsourcing of Training, On -the –job training, Management of
conflict between Training and operations due to manpower constraints,
Development of soft skills and communications. Developing competencies
through e-learning, virtual learning and self directed learning. Training
measurement and impact.

Module D—Personnel Management and Industrial Relations;

1) The personnel functions: Legal aspects of personnel functions, trade

unionism and Industrial Relations; Industrial Relations and Negotiations in
the Indian Banking Industry, Collective Bargaining Concepts; Bipartite
Settlements in Banking, Employee Welfare; Policies and Schemes.

2) Grievance Redressal and Discipline; Mechanism and Processes, Discipline

Management including Domestic Enquiry, Role of Management and
Functions, Conflict Management and Resolution, Frauds in Banks, Risks
attached to Delegation of Financial Powers; Precautions and Controls, Need
for a vigilance Dept in Banks, Diversity and Gender Issues , Dealing with the
cases of Sexual harassment.

3) Workers’ Participation in Management, Experience of Employee

Participation in Indian banking industry.

20
 CAIIB
INFORMATION TECHNOLOGY(optional-9)

Module – A Introduction to Information Technology

Impact of IT on Banking: Changing Financial Environment and It as a
Strategic Response

Hardware(H/W)-Software:(S/W) –
System Software:

Operating Systems (Desktop OS/Server OS)

Windows(Desktop/Server)/UNIX(H.P.Unix, Sun Solaris, Linux, IBM AIX )

Computer Languages – 1st Generation Languages(Assembly), 2nd

Generation(Fortran, Algol, Cobol), 3rd Generation(C, C++, C# and JAVA
etc) and Fourth Generation Languages(Clipper, Power Builder,SQL etc) and
5th Generation Languages(Logic Programming Languages)

Database Management System and Relational Database Management

Systems(Oracle10g, MS SQL-2005, MySQL)
Application Servers(Oracle 10AS, BeWeblogic, WebSheare )
Web Servers(IIS, Apachi etc)
Web Browsers(IE 7.0, Firefox etc)

Application Software: Packaged Software, Custom built Software etc.

Computer Networks, Equipment & Data Communication:

Computer Networks: Network Layers, Topologies, Protocols, IP Address

Mechanisms, LAN, WAN, VLAN, Intranet, Extranet, Internet,

Network Equipments: Cables(BNC, Twisted Pair, Fibre Optics),

Connectors, I/Os, Patch Panel, Jack Panels, Network Racks.

Data Communication: CLL, Leased Lines, MPLS, VPNS, ISDN, Satellite

Links, Wi Fi, Wi Max.,

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Network / Security Equipments: Modems, Hubs, Switches, Bridges,
Routers, Firewalls, NIDS, HIDS, IPS

Module – B Systems and Design

Systems Design & Analysis(Data modeling, Entity Relation ships, Generic

Data Modeling, Semantic Data modeling Normalization( from 1st to3rd and
BCNF, 4th & 5th level of normalization)

Software Development Life Cycle (SDLC) - Various phases of SDLC, In-

house/Out-sourcing, Software Project Management, Computer Aided
Software Engineering (CASE) Tools.

System Architecture: Clients(Hardware/Software),

Servers(Hardware/Software). Client Server Architecture, 3 Tier
Architecture, N-Tier Architecture etc.

Data Warehousing – Data Mining tools

MIS and Organization Support Systems – DSS, EIS, GDSS, Groupware and
Multimedia
Business Intelligence – Expert Systems, Artificial Neural Networks (ANN)
Grid Computing, Virtualization and Consolidation.
.
Module – C Applications in Banking
Centralized Banking System/Core Banking System – System
Administration, Database Administration, Application Server and
Application Administration, Network Administration, Domains, ISPS,
Hosting, Data Downloads/Uploads, Band widths, Data Centre, Data Storage
Devices, Data Backups/Restoration, Disaster Recovery Centre

Delivery Channels – ATM, EFTPOS, Phone Banking, Internet Banking,

SMS Banking, Mobile Banking, Credit/Debit Cards, Smart Cards

E-Mails, SMS alerts

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E-Commerce – Secure Electronic Transfer (SET), Payment Gateways(Credit
card/Debit cards), Authentication of payments etc.

PKI – CCA, CA, RA, Digital Certificate, Digital Signature, Non-repudiation

of Origin, Non-repudiation of Receipt.

Service-Level Agreement

Module – D Security, Controls and Guidelines

Threats to Information System: i)Physical(Insiders/outsiders) ii) viruses,

worms, Trojan hoarse, malwares, software bombs, phishing, spoofing,
spamming, denial of service attacks etc.
Information System Security Measures, Policy, controls, ISO, 17799,
BS7799, IS4477
IS Audit
BCP/DRP
IT Act 2000
Basel guidelines for E-banking
Various RBI Committee Reports on Information Systems

Module – E

IT Service Delivery & Support

1. Service level management practices

2. Operations management – work load scheduling, network services
management, Preventive maintenance
3. Systems performance monitoring process – tools, techniques
4. Functionality of hardware software, data base – Drafting of RFP,
system specifications, SLAs
5. Capacity planning & monitoring
6. Change management processes – scheduled, emergency in
configuration of production systems, application of patches, releases
etc
7. Incident & problem management practices
8. System resiliency tools and techniques – fault tolerance, elimination
of single point of failure, clustering

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CAIIB
Treasury Management (optional-10)
Module A - An overview
1. Financial markets
2. Treasury
• Objectives of Treasury
• Structure and organization
• Functions of a Treasurer
• Responsibility of a Treasurer
Module B- Treasury operations
1. Liquidity Management-CRR/CCIL/RTGS
• Objectives, sources and deployment
• Internal control, Netting
2. Cost centre/Profit centre, integrated treasury, Planning &
control, Risk analysis
3. Treasury instruments
Module C -Treasury & International Banking
• Global scenario and treasury operations
• Exchange rate mechanism
• Dealing and trading operations: control and
orderly conduct, moral and ethical codes, checks
and balances
• Revaluation: Mark to market and profit
calculations , VaR (Value at risk)
• Components of multi-currency balance sheet

Module D - Risk Management

• Treasury and investment policy
• Structure: Front office, Back office and Mid office
• Accounting, valuation and exposure norms
A. Role of information technology in treasury management
B. Regulation and compliance
C. Internal & External audit

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CAIIB
Risk Management (optional-11)

Module A - An overview

a) Risk definition/policies
• Risk Process-Risk Organization
• Key risks-Credit risk, market risk,
operational risk, liquidity risk, legal risk, interest
rate risk and currency risk
b) Asset Liability Management
• ALM Concept
• ALM organization
• ALCO techniques/tools
• Simulation, Gap, Duration analysis, Linear
and other statistical methods of control
c) Risk measurement & Control
• Calculation
• Risk exposure analysis
• Risk management/mitigation policy
• Risk immunization policy/strategy for fixing
exposure limits
• Risk management policy and procedure
• Risk adjusted return on capital
• Capital adequacy norms
d) Risk management
• Capital adequacy norms
• Prudential norms
• Exposure norms
• Concept of Mid office
• Forwards
• Futures
• Options
• Strategies and arbitrage opportunities
• Regulatory prescriptions of risk
management

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Module B -Credit Risk Management

• Introduction
• Basel I
• Three pillars of Basel II and capital for
operational risk
• Frame work for risk management
• RBI guidelines on risk management
• Risk rating and risk pricing
• Methods for estimating capital requirements
• Credit risk –standardized approach
• Credit risk-advanced approaches
• Credit rating/credit scoring and rating
system design
• Credit Bureaus
• Stress test and sensitivity analysis
• Internal Capital Adequacy Assessment
Process (ICAAP )
• Introduction to structured products

Module C -Operational Risk

• Introduction, Basel I & II
• RBI guidelines
• Likely forms of operational risk and causes
for significant increase in operational risk
• Sound Principles of Operational Risk
Management(SPOR)
• SPOR organizational set up and key
responsibilities of ORM
• SPOR policy requirements and strategic
approach for ORM
• SPOR identification, measurement,
control/mitigation of operational risks
• Capital allocation for operational risk,
methodology, qualifying criteria for banks for the
adoption of the methods

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 • Computation of capital charge for
operational risk

Module D- Market risk

• Introduction and definition
• Prescriptions of Basel I & II
• Liquidity risk
• Interest rate risk
• foreign exchange risk
• Price risk (Equity)
• Commodity risk
• Treatment of market risk under Basel
a) Standardized duration method
b) Internal measurement
approach-VaR

Module E - Risk Organization and Policy

• Risk Management Policy

• Inter-linkages to -Treasury
-Credit
-ALCO
__________________

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